Investor · Eugene, OR · Member since 2016 · 5 posts · 2 votes
Hey there! I am pretty new to BP so sorry if this is a dumb question. I have kicked around the idea of purchasing in a market that is no my own, due to the lack of cash-flow in my area. I have ties (from my college) out in the midwest, and am considering working an out of state partnership at this point to take advantage of the cheaper prices and better cash-flow. Could some of the more experienced out of state investors give me some advice on what they to "build their team" as well as if you have done any partnerships with a local boots on the ground person how that typically looks. Do you give them equity in the deal? Pay them a finders and management fee? I want to take care of that person so they feel like working with me is worth their time. Thanks.
thankd for your reply rob. I am guessing your are the boots on the ground guy typically? Do you work with people looking to buy in the cleveland market?
@Tj Barrett are you still looking to invest OOS in the midwest? OKC isn't a market that should be overlooked. I'm happy to get all of your questions answered about this market if it's on your radar!
As an overview you're looking at 8% cap rates, 80k price points and 1% taxes. This all boils down to the magic words.. cash flow! Not to mention it's a super stable market. The last recession barely shook us!
That all sounds great! I’d love to find a partner out your way that could be my boots on the ground person. Have you worked with other out of state investors?
@Tj Barrett I wouldn't partner with someone on a smaller out of state purchase. When I sell a property, I sell it flat out to an investor at market value & occupied, and recommend them to all of the local affiliates they would need to make the property work out for them over time.
Don't split your profits with someone, just get referred to one or two solid property management companies, and buy an already stable, cash flowing property from whichever source you may (MLS, wholesaler, turnkey provider, etc...) so you can keep your returns to yourself. If you're doing a more complicated deal, maybe a big rehab job or something... then partnership might make sense. I wouldn't necessarily recommend starting with that type of deal anyways, though. You may never want to do that type of deal if you prefer to be on the more passive side of the spectrum.
With the right approach out of state is not that hard. Especially these days, where managers in the midwest are already working with so many west coast investors and have adjusted their systems to better accommodate out of state clients. One thing I will advise- stay away from "sort of good" cash flow. Don't settle for a 1% deal. Look for 10 caps if you can.
Everything I do revolves around OOS investors and the OKC market. I'm happy to answer questions. I've sent you a connection request so that we can stay in touch!